Suit Seeks Damages of at Least $1 Billion as Ex-Microsoft Chief Ballmer Stands Ready to Buy the Team

Donald Sterling,
the disgraced owner of the Los Angeles Clippers, sued the National Basketball Association on Friday as he fights to retain control of the franchise, while former Microsoft chief executive
Steve Ballmer
stands by ready to pay a record $2 billion for the team.

The suit, filed in federal court in California, accuses the league and Commissioner
Adam Silver
of punishing Mr. Sterling based on an "illegally" obtained recording as it asks for at least $1 billion in damages. It also asks to have Mr. Sterling remain in place as owner and for the league to drop a $2.5 million fine levied against him over racist comments that were made public in the recording.

Mr. Sterling accuses the NBA of antitrust violations and of breach of contract, saying he did nothing under the league's constitution to warrant the punishments and loss of the team. He also alleges unfair treatment, citing examples of inflammatory remarks by others within the league that warranted lesser penalties.

"The punishment is capricious, arbitrary, unreasonable, and grossly discriminatory compared with similar 'speech' offenses," the suit says.

More

Mr. Sterling's wife,
Shelly Sterling,
had promised to indemnify the NBA against any lawsuit from Mr. Sterling over the matter, the league said earlier Friday, as it announced plans to move ahead with a sale of the team. The league's board of governors must approve any sale.

"Mr. Sterling's lawsuit is predictable, but entirely baseless," NBA Executive Vice President and General Counsel
Rick Buchanan
said. "Among other infirmities, there was no 'forced sale' of his team by the NBA—which means his antitrust and conversion claims are completely invalid. Since it was his wife Shelly Sterling, and not the NBA, that has entered into an agreement to sell the Clippers, Mr. Sterling is complaining about a set of facts that doesn't even exist."

As the league, Ms. Sterling and Mr. Ballmer publicly marked what the league called a "binding agreement" to sell the Clippers, Mr. Sterling ramped up his fight against the league.

"If we win anything in our suit, [Ms. Sterling] is the one who is going to have to pay it," said Mr. Sterling's lawyer,
Max Blecher.

Ms. Sterling's lawyer,
Pierce O'Donnell,
said Friday evening that he had just received a copy of the lawsuit from Mr. Sterling. He declined to comment on the details of the suit, which he said he hadn't yet read, or on Ms. Sterling's decision to offer indemnity to the NBA.

Ms. Sterling believes that she has the authority to declare Mr. Sterling mentally incapacitated and to sell the team without his consent under the terms of their ownership of the franchise, people familiar with her thinking said. Mr. Sterling's lawyer said that this claim is "not true."

The league has been reluctant to get into a situation that could leave it open to lawsuits from Mr. Sterling, and ideally wanted to have a signed agreement from Mr. Sterling saying he won't sue before it signs off on the sale of the team. Initially, Mr. Sterling agreed to allow his wife to sell the team, but later changed his mind, his lawyer said. He responded earlier this week to charges from the NBA that he damaged the league and the team with the comments, calling the league's efforts to force a sale illegal and saying the process is stacked against him.

The league is punishing Mr. Sterling "for a purely private conversation with his lover that he did not know was being recorded and that he never intended would see the light of day," according to the response from Mr. Sterling to the NBA.

If the sale to Mr. Ballmer occurs, it would come at a price almost four times as much as anyone has paid for an NBA team.

Mr. Ballmer's price for the Clippers is especially remarkable given that nearly one-quarter of the $2.1 billion paid for the L.A. Dodgers—the record paid for a sports team—was attached to real estate that came with the team. The Clippers deal includes no significant real estate contingent as the team doesn't own, but rather leases, the Staples Center where it plays.

The deal for the team doesn't include a pricey new practice facility in Playa Vista. Mr. Ballmer will lease that building, according to people familiar with the deal.

While bidders believed there is great value in soon-to-be-negotiated local and national cable deals, a driving force behind Mr. Ballmers's rich price was a desire to put forward an amount that would convince the Sterlings to sell, according to people involved in the talks.

"The goal was to come up with a number that was 'wow' enough to convince an unwilling seller to sell," one of the people said.

It sure looks to me that the NBA has taken actions based on hearsay evidence from what amounts to an illegal wiretap. I think that - rather than what he actually did - NBA Commissioner Silver should have noted the nature of the evidence, said that the NBA condemns such comments as attributed to Sterling, and just urged him to sell the team. After all, if even a few of the Clippers players find the means to leave the team - who wants to work for such an owner? - they could never succeed.

I just cannot believe Shelly, his wife, is doing this to Donald. Shelly is trying to play the role of a victim and making Donald look worse in the process. The reason for forming a trust is to avoid estate taxes, so it is hard for me to conceive Donald or his trust would sell the team before Donald's passing without coercion from an outside party.

We need to ask ourselves, "would you ban Donald for what he said, yes or no? would you limit the freedom of speech pertaining to race, gender, and equality to the people of America, yes or no?" The NBA by laws, partnership bylaws, UCC, or any binding agreement must be in accordance with federal and state laws.

The only argument the NBA has is that Donald hurt the business operations of the NBA. The NBA didn't have enough time to hire a group of economists to actually find out if Donald had impacted the league. The NBA is definitely acting with emotions over fact.

I smell another lawsuit. If Shelly's camp had anything to do with "Donald Sterling was diagnosed with the symptoms of Alzheimers" story, its another release of private information, contrary to federal law, HIPPA.

Boy, it would sure be nice if someone with standing were able to get the NBA into court over anti-trust violations. The NBA has always been terrified that someone would take it the full length of the court, as they've always settled before a case could be heard. If this isn't just for show to get a bigger payout, and Sterling does in fact take them the distance, I fully expect the NBA to finally get their exemption revoked. Boy, that'd be a sweet, sweet day of reckoning. Sadly, I doubt it'll happen. They'll pay Stern off and he'll go away just like every other person that made the same threat.

Sterling wins twice on this: first, the $2B sales price for the Clippers (that he bought for only $12.5 million in 1981). Second, he will wind up winning the lawsuit against NBA. It should be easy for a good attorney to convince a jury that the NBA had no legal right to impose consequences for something said in a private conversation. In the end, Sterling is getting about $100 million for every offensive word that he spoke.

The initial incident was a privet conversation between Sterling and his "girl-friend" in his own home. It was not even a derogatory comment he was giving his "girl-friend" some advice on how to handle her life. It is not any where as derogatory or violent that "singers" put out over the airwaves every single hour of the day. The $ 2,500,000 fine by the NBA is dispreportenatly outrageous. All of the on Mass-Media comments about it is being funded and organized by someone in an effort to buy the teem at a vastly discounted price.

I suspect bidders Oprah Winfre and Laurene Powell Jobs are behind all the Mass-Media hype about this. In a fare and just world they and their frontman lawyer would be prosecuted under RICO laws.

@Howard Tyson Yeah, they removed my comments too. The truth is that no one would want their girlfriend hanging out with and taking pictures with a philandering HIV infested man who is supposed to be married. But then again, I can't even count on my fingers how many black basketball players abandoned their black wives and black children to date models instead. Shaquille O'neal abandoned his black wife and black children to date a model. Michael Jordan abandoned his black wife and black children to date a model. Lamar Odom abandoned his black wife and black children to date a Kardashian. I can go on. These black players who condemn Donald Sterling should remove the planks from their own eyes before criticizing the speck in another man's eye. With the kind of track record black NBA players have, you wouldn't want any of them hanging out with your girlfriend either. They're known for philandering because they have a concrete record of doing it.

@Chris Petruzzi Would the case even go before a jury? The merits of jury vs. bench trial can be debated all day. In the end I doubt the case even goes to trial. Sterling changed his mind once. He can change it again. It's too bad because this case has the makings of a real legal blockbuster; the odd ownership (and personal) arrangements with and between the sterlings, the relationship of the sterlings as nba owners to the nba, somewhat novel claims of property, contract, evidence, personal capacity, US constitutional and antitrust law and the intermingling between the state and federal claims. For too many decades, these sports leagues have really been operating outside the law. They all have antitrust exemptions and they don't honor their own contracts--look up the nfl "bounty" case and how those fines were slapped down. A case like this could really clarify and make some worthwhile new law. Hopefully it goes the distance.

Most likely because she was quoting the wording from Sterling's lawsuit which alleges that the recording was made illegally. There hasn't yet been a ruling whether or not the recording of the conversation was legal or not. His former mistress asserts that he gave his permission to be recorded, but I doubt he'd agree.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.